Factory growth slowest in 29 months

The expansion of Indian manufacturing sector output slowed for the fourth successive month. The seasonally adjusted HSBC Purchasing Managers Index (PMI) a headline index designed to measure the overall health of the manufacturing sector posted 52.6 in August,down from Julys 53.6. While an overall improvement in business conditions was signalled,the rate of expansion was modest and the weakest in the current 29-month sequence of growth.

New export business received by manufacturers in India decreased markedly during August,with the rate of contraction one of the sharpest in the series history.

Panellists cited a softening in global economic conditions as the main contributor to the fall in new orders received from export markets. This contributed to a further slowdown in the growth rate of overall new work intakes,which was the weakest in the current 29-month sequence of expansion, HSBC said.